Dell Technologies AI Server Momentum Quickens, Boosting Outlook in 2025, 2026, Morgan Stanley Says

/ / Technology /

Dell Technologies (DELL) remains “the best way to play” prospects for artificial-server momentum, storage demand and an improving personal-computer market, boosting prospects for fiscal 2025 and 2026, Morgan Stanley said Wednesday in a report. Morgan Stanley raised its price target on Dell to $152 from $128 and maintained an overweight rating on the stock. Dell shares jumped 9.5% in recent trading Wednesday. Customer and supply chain checks in the past month show Dell gaining momentum “in enterprise infrastructure, including competitive AI server wins and inflecting storage strength,” the report said. The trend suggests Dell’s “strongest forward spending intentions” in more than six years, Morgan Stanley said. Recent checks also indicate that component vendors and partners are aiming for the higher end of the estimate for AI server builds in 2024, potentially reaching 60,000 for Dell, the report said. “All in, we are hearing about more AI server momentum” at Dell […]

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Nvidia Set for Robust Q1 Revenue Fueled by Reduced Lead Times, UBS Says

/ / Technology /

Nvidia (NVDA) is poised for a strong Q1 revenue, likely reaching $26 billion, owing to reduced lead times on chips, UBS Securities said in a note emailed Wednesday. The mid-December initial shipment timing for the Blackwell processors has some investors concerned about the transition, UBS said. The launch of Blackwell chips is expected to drive even stronger demand for next-generation GB200 rack system for data centers, leading to increased revenue and EPS forecasts for next year, the note said. But these concerns are likely overstated, the firm said, and recent talks with customers and supply chain assessments suggest strong demand for its graphics processing unit microarchitecture “Hopper” that will persist throughout the year. Despite the sell side lagging in projections for 2025, UBS believes most investors expect EPS in the high-$30s, below its estimates following recent checks. With this demand outlook, “we would expect and hope to see another substantial

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Amazon Prime Video Should Continue Growth but Financial Results Will Take Time, Oppenheimer Says

/ / Consumer Discretionary /

Amazon.com (AMZN) continues to be one of the few large-cap companies thriving from the public’s shift to ecommerce, with the company succeeding on multiple fronts, including its Prime Video unit, Oppenheimer said in a note emailed Wednesday. Following the launch last year of an ad-supported tier for Prime Video, Amazon this week hosted an Upfront presentation for the first time to attract advertisers to its movie and TV content. The event had plenty of “star power ” to get advertisers’ attention – including projects led by Jake Gyllenhaal, Will Ferrell and Reese Witherspoon – although the Oppenheimer analysts said the Upfronts traditionally have focused on selling ad space for TV series rather than movies. Oppenheimer also said that bringing on top-shelf talent for its movies and television shows is expensive and that spending will likely pay off with increased viewership. Sports similarly will attract viewers over time as Prime secures

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Cisco Systems Fiscal Q3 Non-GAAP EPS, Revenue Fall; 2024 Guidance Revised — Shares Up After Hours

/ / Telecommunications /

Cisco Systems (CSCO) reported fiscal Q3 non-GAAP earnings late Wednesday of $0.88 per diluted share, down from $1.00 a year earlier. Analysts polled by Capital IQ expected $0.82. Revenue for the quarter ended April 27 was $12.70 billion, down from $14.57 billion a year earlier. Analysts surveyed by Capital IQ expected $12.63 billion. The company expects fiscal Q4 non-GAAP EPS between $0.84 and $0.86 and revenue ranging from $13.4 billion to $13.6 billion. Analysts polled by Capital IQ expect $0.84 and $13.54 billion, respectively. The company now expects fiscal 2024 non-GAAP EPS of $3.69 to $3.71 and revenue between $53.6 billion and $53.8 billion. The previous guidance was for non-GAAP EPS between $3.68 to $3.74 and revenue between $51.5 billion and $52.5 billion. Analysts surveyed by Capital IQ expect $3.64 and $53.54 billion. The company maintained its quarterly dividend at $0.40 per share, payable July 24 to stockholders of record

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CFRA Keeps Buy Opinion On Class A Shares Of Berkshire Hathaway Inc.

/ / Financials /

Berkshire just disclosed in its latest SEC holdings filing that the stock it has been confidentially building an equity positon in is property-casualty insurer Chubb Ltd (CB 253 ****). Berkshire disclosed that is owns some 25.9 million CB shares, worth about $6.6 billion, making the CB position a top-ten holding for Berkshire. Our view of CB is positive as well, and we believe the shares are undervalued versus peers. We expect CB shares to open higher tomorrow morning (May 16), as investors react to this news and speculate whether Berkshire will keep an equity stake in CB or pursue an outright acquisition. BRK’s current equity stake gives the firm exposure to one of the best performing financial sector subgroups at a below-peer valuation. We can’t speculate whether Berkshire would pursue an outright acquisition of CB, but we note their business mixes are highly complementary.

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Cisco(CSCO) Q3 2024 Earnings Conference

/ / Telecommunications /

The following is a summary of the Cisco Systems, Inc. (CSCO) Q3 2024 Earnings Call Transcript: Financial Performance: Cisco Systems reported Q3 total revenue of $12.7 billion, down 13% year-over-year. Total product revenue was $9 billion, down 19%, and service revenue was $3.7 billion, up 6%. Non-GAAP net income was $3.6 billion, down 14%, and non-GAAP earnings per share was $0.88, down 12%. The Q3 operating cash flow was $4 billion, down 24%. Cisco returned $2.9 billion to shareholders via share repurchases and dividends in Q3, with a total return of $8.5 billion year-to-date. Business Progress: Cisco’s third quarter marked the successful acquisition of Splunk which contributed over $4 billion in annualized recurring revenue. The company saw product order growth in two of its significant product portfolios – data center and campus switching – and also in security and collaboration product categories. Future growth in fiscal ’25 is expected to

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Boeing Violated Criminal Settlement After 737 MAX Crashes, Justice Department Says

/ / Industrials /

By Dave Michaels and Andrew Tangel The Justice Department said Boeing violated a settlement reached three years ago over its employees’ role in two fatal jet crashes, exposing the company to potential criminal prosecution over one of the biggest crises in its history. Boeing admitted in January 2021 that two employees misled federal air-safety regulators over facets of the 737 MAX, but it entered into a form of corporate probation that allowed it to avert prosecution at the time. Now, prosecutors say the company failed to live up to obligations that it committed to in the $2.5 billion settlement. In January a fuselage panel blew off an Alaska Airlines 737 MAX, the same type of jet involved in the earlier accidents. The latest accident triggered a new criminal investigation and sparked fresh worries about a safety culture that Boeing was supposed to have fixed. The company also recently told regulators

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Wall Street Turns Up the Heat on Companies to Perform — WSJ

/ / Financials /

By Hardika Singh Wall Street is showing little patience for companies that don’t live up to expectations. With the first-quarter earnings season nearly over, companies in the S&P 500 are on pace to deliver a 5.4% jump in profits from a year ago, the biggest increase in nearly two years, according to FactSet. But those that fall short of investor forecasts are being punished more heavily than usual. Shares of companies that missed estimates have slid an average of 2.8%, compared with the five-year average of a 2.3% decline. Meanwhile, companies that outperform aren’t being given any special prizes. Those that beat analyst forecasts have seen their shares gain an average 0.9%, roughly in line with the five-year average of a 1% advance. That is according to FactSet data that looked at share prices in the two days before companies reported through the two days after. “[The market] won’t ask

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Home Depot Likely to Post ‘Largely in Line’ Q1 Results, Reiterate Outlook, Wedbush Says

/ / Consumer Discretionary /

Home Depot’s (HD) Q1 results on May 14 will likely be “largely in line” with market expectations and the retailer will likely also reaffirm its “conservative” 2024 guidance, Wedbush said in a note to clients on Friday. “While we initially viewed the company’s 2024 guidance as conservative, we now see it as realistic given choppy sales trends partly driven by a delayed spring, increasing mortgage rates and a further-delayed housing recovery,” said Wedbush analysts including Seth Basham. However, the investment firm sees the retailer delivering a quarter-on-quarter improvement in comps to about -2%, which is in line with Wall Street estimates, and would be better than the -3.5% in Q4. Wedbush also sees Home Depot’s Q1 gross margins at 34.2% compared with consensus estimates at 34%, with “the slight upside driven by permanent cost cuts and reductions in product and transportation costs.” “All in, we see slight upside potential to

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Walmart Fiscal Q1 Adjusted Earnings Likely to Miss Market Estimates, BofA Says

/ / Consumer Discretionary /

Walmart’s (WMT) fiscal Q1 adjusted earnings and US comparable sales are expected to fall short of market estimates while traffic trends are seen remaining strong, BofA Securities said Friday. The retail giant is scheduled to report fiscal Q1 results Thursday. BofA expects adjusted earnings of $0.51 per share and US same-store sales growth of 3.5%. The market consensus is for $0.52 and 3.7% growth, respectively, according to the firm. “Our F1Q comp forecast implies a slight deceleration vs. F4Q’s +4.0% given moderating grocery inflation and likely continued softness in general merchandise,” BofA analyst Robert Ohmes said. “However, we think strong observed transactions for WMT in F1Q according to Bloomberg Second Measure card data implies continued strong underlying momentum for WMT.” BofA maintained its buy rating on the Walmart stock, with a $67 price objective.

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Home Depot, Lowe’s Likely Face ‘Subdued’ Expectations Heading Into Quarterly Prints, Oppenheimer Says

/ / Consumer Discretionary / ,

Home Depot (HD) and Lowe’s (LOW) likely face “subdued” expectations for their upcoming financial results amid continued macro headwinds for the home improvement retail sector, Oppenheimer said Friday. Home Depot is scheduled to report its fiscal first-quarter results Tuesday, while Lowe’s will report May 21. Oppenheimer expects Home Depot to report earnings of $3.49 a share and a comparable-store sales decline of 3.5%. Wall Street is looking for $3.60 and a 2.2% fall, respectively, the brokerage said in a note. Lowe’s EPS is pegged at $2.94, with comparable-store sales seen dropping 6.5%, versus the Street’s expectations for EPS of $2.95 and comparable sales down 5.7%, according to the note. “Consumer demand trends within home improvement retail remain challenged and are likely to stay sluggish, at least through 2024, owing to ongoing post-pandemic dislocations, weaker underlying confidence, and historically subdued housing activity, aggravated by elevated rates,” Oppenheimer analysts Brian Nagel, William

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